UPDATE: Goldman Sachs Upgrades Granite Construction On Outlook of Construction Market

In a report published Thursday, Goldman Sachs analyst Jerry Revich upgraded Granite Construction

from a Neutral rating to a Buy rating and raised the price target from $32.00 to $36.00. In the report, Goldman Sachs says "We upgrade GVA to Buy from Neutral. We see bottoming margins, leverage to an accelerating US construction recovery, and significant upside to midcycle earnings. While our view on the US construction cycle has not changed, we now see attractive risk-reward for the stock following a healthy recalibration post a 3Q miss and mounting visibility on a US non-residential construction recovery. We estimate mid-cycle EPS of $3, potentially in 2016 driven by (1) the elimination of contract losses in a less competitive bid environment, consistent with prior cycles, (2) improved operating leverage in construction materials, and (3) SG&A leverage." Granite Construction closed on Thursday at $30.31.